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Morrisons set to unveil bumper Christmas as restrictions buoy grocery sales

Henry Saker-Clark, PA City Reporter
·2-min read

Morrisons is set to reveal soaring Christmas sales as the tightening of coronavirus restrictions continued to aid grocery trading in recent months.

The supermarket chain will unveil its latest set of trading figures to investors in a Christmas update on Tuesday January 5.

A consensus of analysts have said they expect the grocer to post an 8.3% rise in like-for-like group sales for the past 22 weeks of the second half of the financial year.

Morrisons
Morrisons saw group sales increase by 8.8% in the first half of the 2020/21 year (Jon Super/PA)

Analysts have forecast that this will include an acceleration in sales over the Christmas period following 7.9% like-for-like growth in the third quarter.

But this represents a slight slowdown in sales after sustained high demand during the first national lockdown helped Morrisons deliver 8.8% like-for-like growth in the first half of the year.

England’s second national lockdown in November and more severe tiered restrictions are expected to have boosted sales further during the key Christmas period.

Nevertheless, Morrisons warned at the start of December that the impact of Covid-19 is expected to cost it £270 million by the end of 2020/21, some £40 million above previous expectations.

Earlier this month, it also followed Tesco in choosing to hand back its business rates relief for the year to the Government.

It said it will return a sum of £274 million, with £230 million of that relating to the financial year to January 2021, but chief executive David Potts said the company would not need to change profit expectations suggesting healthy recent trading.

The Big Four supermarket is forecast to deliver £433 million in pre-tax profits for the year.

Investors will also be keen to find out whether, despite the Prime Minister sealing a Brexit deal, the UK’s exit from the EU will impact profitability or disrupt the retailer’s supply chain.

“Analysts and shareholders will also look for updates and comments on new store opening plans, the ongoing Fresh Look store refurbishment programme and Brexit,” Russ Mould, investment director at AJ Bell, said.

He said investors will be particularly keen for an update on how Brexit will impact operations “in light of the Christmas Eve deal and concerns over whether blockages at ports would lead to issues with product availability or even price increases”.